help customers avoid remorse

Monday, November 26, 2018

36% spend money they don’t have on fomo

This is the sixth of 20 daily THOUGHTS examining emotions in marketing.This phenomenon is so common, there is an acronym for it – FOMO – fear of missing out. While it is completely irrational, the fear of missing out is incredibly common and it is a significant emotional driver of consumer behaviour. It seems that most consumers are frightened of missing out and many will spend money they don’t have, or buy at a time they should not, due to the irrational FOMO.

Various research completed in 2018 found that:

36% of consumers spend cash they don’t have due to FOMO

40% of millennials have gone into debt due to FOMO

21% of consumers will spend more money due to FOMO

This research suggests that fear of missing out can cause consumers to spend, even when they don’t have the money, and to spend more than they might otherwise have done, all due to FOMO.

FOMO is a powerful driver of consumer behaviour. It is, however, just one of a number of areas where fear is a driver of consumer behaviour. Consider:

Fear is a key driver of insurance sales

Fear is a key driver of security system sales

Fear is a major driver of fashion purchases

Fear of one party makes people vote for another party

Consumers buy insurance for fear of loss. Consumers buy security due to fear for their safety. Consumers buy fashion for fear of not fitting in. Consumers buy a political party because of fear of the alternative.

It has been said that there are two base emotions driving human behaviour – love and fear. There is no doubt that fear is a powerful driver of consumer behaviour.

Fear and its likely impact on consumer behaviour need to be understood by marketers.
Many marketers are already addressing and even creating fear in their marketing. Certainly:

Marketers have leveraged FOMO by highlighting the scarcity of a product

Insurance companies have driven the fear of catastrophe

Security systems use ‘scary’ images to cause us to fear intruders

Retailers make us afraid of being the odd person out

Politicians are very good at making their supporters fear the alternative

Indeed, it could be argued that marketing techniques to leverage fear are all too common and may be losing their effectiveness. This is almost certainly the case. We might wonder who believes statements such as – ‘buy today or miss out’ or ‘stock strictly limited’.

Interestintly, some people do – provided that the claim being made is credible.

Credibility is central to leveraging fear to drive sales. It is essential to make claims that are credible and create ‘fear’ in a credible way. Statements have to be credible or they will not be believed.

INSIGHTS

There are few more significant drivers of consumer behaviour than fear. Fear is one of the more powerful drivers of both purchase and, potentially, brand selection.

Fear only works effectively in marketing when the language being used to create it is credible to the target audience. For example – suggesting to consumers that they will miss out on a low price when sales are nearly monthly, is less than credible.